Truisms such as MV = PQ, C + I = Y, and GC = have
played a not inconsiderable part in the development of our
science. Generally speaking, they have enabled the economist to visualize rather complicated phenomena as being
comprised of just a few major elements; they have also provided their share of intellectual fun in inciting some frequently exacerbating debate, in inducing fruitful conjectures
on whether they hold or conceal new truths and real laws,
and in maintaining a serene detachment from chronic endeavors to wring from them significant causal relations.

I think I have found a more useful truism than the MV = PQ equation--one which is more susceptible to empirical
verification and predictive application than this has proved
to be. It will be my purpose in the following pages to justify
this observation.

Two Tentative Laws

I propose to develop a tautology which covers the same
general realm as the Equation of Exchange (hereafter EOE),
and with the same purpose of specifying the major variables
affecting the level of prices. Like the EOE, this one is also
directly informative and illuminating, but its superior virtue

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